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Posts tagged "foreclosure litigation"

Failure to Comply With Post-Foreclosure Notice Provisions Does Not Void Foreclosure

The Massachusetts Supreme Judicial Court ("SJC") has held that a bank's failure to comply with post-foreclosure notice provisions in Mass. G.L. c. 244, § 15A ("Section 15A"), does not render a foreclosure void.  Turra v. Deutsche Bank Trust Company Americas, 476 Mass. 1020 (2017).  The SJC's decision clarifies its prior rulings that appeared to state that any failure to comply with a provision appearing in Mass. G.L. c. 244, §§ 11-17C, rendered a foreclosure void.

Ninth Circuit Denies Class Action For Allegedly Fraudulent Mortgage Modification Delays and Subsequent Foreclosures

The United States Court of Appeals for the Ninth Circuit has refused to reinstate a putative class-action suit accusing numerous banks and other mortgage servicers of fraudulently enticing mortgagors into applying for mortgage loan modifications to continue collecting servicing fees prior to foreclosure.  The Ninth Circuit panel agreed with the United States District Court for the Central District of California and the defendants that the servicers were not at fault for the foreclosures where the borrowers failed to pay their mortgages.  Casault v. OneWest Bank, et al., 2016 WL 4137656 (9th Cir. Aug. 4, 2016).

MERS Requires No Authorization to Assign Mortgage

A Judge of the Massachusetts Superior Court, relying on earlier Massachusetts Appeals Court cases, has held that Mortgage Electronic Registration Systems, Inc. ("MERS") does not need authorization from the holder of the promissory note secured by a mortgage before assigning the mortgage to another entity.  O'Neil et al. v. The Bank of New York Mellon, 33 Mass. L. Rptr. 1, 8 (Mass. Super. July 20, 2015).

Section 35A Imposes No Time Limit on Completion of Foreclosures

The statute providing borrowers with a right to cure mortgage payment defaults before acceleration and foreclosure can occur imposes no deadline on completion of foreclosure proceedings once commenced, according to two very recent Massachusetts decisions.

U.S. Supreme Court Rules That Underwater Mortgages Cannot Be "Stripped Off"

While the American economy has shown tentative signs of stabilization and recovery, the nation's courts continue to grapple with legal questions that emanate from the Great Recession and the bursting of the so-called "housing bubble."  In one notable development, the United States Supreme Court has decided an important question regarding the treatment of home mortgages in Chapter 7 bankruptcy cases (i.e., cases in which the bankruptcy trustee gathers and sells the debtor's non-exempt assets and uses the proceeds of such assets to pay creditors in accordance with the Bankruptcy Code.)  

Foreclosure Is Not Debt Collection Under the FDCPA in the 11th Circuit

The United States District Court for the Middle District of Florida has issued an opinion collecting 11th Circuit precedent and reiterating that foreclosure or other enforcement of a security interest, without more, is not "collection of any debt" under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692-1692p ("FDCPA").  While an enforcement of a security interest comingled with an attempt to collect payment on the underlying debt may fall under the FDCPA, mere foreclosure or other security enforcement does not.  Gillis v. Deutsche Bank Trust Company Americas, 2015 WL 1345309 (M.D. Fla., Mar. 23, 2015).

Supreme Judicial Court: 'Try Title' Actions Challenging Foreclosure Are Only Available After Foreclosure Occurs

In a decision handed down earlier this month, the Massachusetts Supreme Judicial Court (the "SJC") has resolved a split among Land Court justices regarding the availability of a "try title" action brought against a mortgagee prior to foreclosure.

Supreme Judicial Court: 'Try Title' Actions Challenging Foreclosure Are Only Available After Foreclosure Occurs

In a decision handed down earlier this month, the Massachusetts Supreme Judicial Court (the "SJC") has resolved a split among Land Court justices regarding the availability of a "try title" action brought against a mortgagee prior to foreclosure.

SJC Says Springfield Foreclosure Ordinances Are Preempted

In a decision handed down earlier this month, the Supreme Judicial Court (the "SJC") has held that two foreclosure-related local ordinances enacted by the City of Springfield (the "City") are preempted by existing Massachusetts statutes.

Right-to-Cure Notice Naming Mortgage Servicer Deemed Effective

Naming a mortgage servicer as mortgagee on a statutory right-to-cure notice satisfies the requirements of the Commonwealth's pre-foreclosure right-to-cure statute, according to a recent decision of the Appeals Court.

Massachusetts Appeals Court Upholds MERS Mortgage System

The Massachusetts Appeals Court has joined the U.S. Court of Appeals for the First Circuit in upholding the Mortgage Electronic Registration Systems, Inc. ("MERS") business model under Massachusetts law.  Explicitly referencing the First Circuit's decision in Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir. 2013), the Appeals Court in Sullivan v. Kondaur Capital Corp., 85 Mass.App.Ct. 202 (2014), held that mortgagors have standing to challenge an assignment of their mortgages, but only to the extent that such assignment is void, not merely voidable.  Further, the Appeals Court found that the MERS system of mortgage assignments fully comports with Massachusetts law.

First Circuit Affirms Culhane, Woods, and MERS Assignments of Mortgages

The United States Court of Appeals for the First Circuit has reaffirmed its prior holdings in Culhane v Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir. 2013) and Woods v. Wells Fargo Bank, N.A., 733 F.3d 349 (1st Cir. 2013) regarding Mortgage Electronic Registration Systems, Inc.'s ("MERS") assignments of mortgages.  The Court in Wilson v. HSBC Mortgage Services, Inc., 2014 WL 563457 (1st Cir. Feb. 14, 2014) found that while a plaintiff has standing to challenge a void assignment, they lack standing to challenge allegedly voidable assignments, and the MERS system for assignments comports with Massachusetts law.

Contemporaneous Evidence of Off-Record Assignments Satisfies Ibanez

The Massachusetts Land Court division of the Trial Court has affirmed that contemporaneous evidence of off-record assignments are adequate to satisfy the requirements of U.S. Bank N.A. v. Ibanez, 458 Mass. 637 (2011).

First Circuit Finds No Private Right of Action Under HAMP

The First Circuit has affirmed a holding finding that no private right of action exists for homeowner-borrowers under the Home Affordable Modification Program ("HAMP"), bringing clarity on this issue to courts within the Circuit.  In the underlying mater, Mackenzie v. Flagstar Bank, FSB, 2013 WL 139738 (D. Mass. Jan. 9, 2013) aff'd, 2013 WL 6840611 (1st Cir. Dec. 30, 2013), Magistrate Judge Bowler of the United States District Court had held a borrower is not an intended third-party beneficiary of the Servicer Participation Agreement ("SPA") among the banks and the federal government relating to HAMP.  The District Court further held that absent an independent duty to modify the mortgage, neither the existence of a mortgagor-mortgagee relationship nor HAMP itself created any duty enforceable by the borrower.

Claims Against Failed Institutions Must Comply with Claims-Processing Regime Set Forth in FIRREA

The U.S. Court of Appeals for the First Circuit recently confirmed that the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) provides a firm jurisdictional bar to consumer protection claims based on loans made by failed institutions but now held by successor banks following a transfer facilitated by the Federal Deposit Insurance Corporation (FDIC) unless the claimants have complied with a strict administrative regime.  In Demelo v. U.S. Bank National Association, 727 F.3d 117 (1st Cir. 2013), in which Stephen Reilly and Jennifer Greaney of Fitch Law Partners LLP represented the defendant U.S. Bank National Association (U.S. Bank), the First Circuit held that claimants against a failed institution must comply with the claims-processing regime prescribed by FIRREA.

Title Insurer Not Required to Defend Suit Against Validity of Underlying Debt

The Massachusetts Supreme Judicial Court has held that a title insurer has no duty to defend a bank against a third-party suit challenging the validity of the underlying debt, absent a specific provision in the title insurance policy envisioning such a claim.  Deutsche Bank National Association v. First American Title Insurance Company, 465 Mass. 741 (2013).

First Circuit Upholds MERS Mortgage System Under Massachusetts Law

The First Circuit has affirmed a holding finding that the system under which mortgages are held in the name of Mortgage Electronic Registration Systems, Inc., commonly known as MERS, comports with Massachusetts law relating to mortgage transactions.  In the underlying matter, Culhane v. Aurora Loan Services of Nebraska, 826 F.Supp.2d 352 (D.Mass. 2011), Judge Young of the United States District Court had held that a mortgagor possesses standing to challenge the chain of assignment of his or her mortgage in defense to a foreclosure action, but further held that the MERS system of registration and transfer of mortgages is lawful.

Even Technical Errors Can Invalidate Foreclosure

Even technical errors in mortgage and foreclosure documents can invalidate the foreclosure and subsequent sale of a condominium unit, according to the Massachusetts Housing Court.  Following foreclosure, and purchase at the foreclosure sale by the foreclosing bank, the former owner asserted that erroneous references in the foreclosure documentation for the unit invalidated the foreclosure and left her with the superior right of possession.  The Housing Court, J. Muirhead, agreed and invalidated the foreclosure.  East West Bank v. Chung, Lawyers Weekly No. 17-001-13.

Liability for Payment of Note Required to Rescind Mortgage

A mortgagor who is not personally liable for payment of the note securing a property loan cannot rescind the loan transaction or mortgage, the United States Bankruptcy Court for the District of Massachusetts has held.  In re Smith-Pena v. Wells Fargo Bank, N.A.In re Smith-Pena v. Wells Fargo Bank, N.A., 2013 WL 28696 (Bankr. D. Mass. Jan. 2, 2013).

Standing Is Limited In 'Soldiers and Sailors' Actions - For Both Plaintiffs and Defendants

Earlier this week, the Massachusetts Supreme Judicial Court (the "SJC") held that a plaintiff who is not a present mortgagee (or the mortgagee's agent) has no standing to bring an action under the Massachusetts Soldiers' and Sailors' Civil Relief Act for a determination that the named defendant is not entitled to the protections of the Federal Servicemembers Civil Relief Act (the "SCRA"). 

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